UPDATE: Bank of America Upgrades Cabot Oil & Gas Corporation to Buy, Raises PT on Improved Marcellus Well Quality

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In a report published Thursday, Bank of America analyst Doug Leggate upgraded the rating on Cabot Oil & Gas Corporation
COG
from Neutral to Buy, and raised the price target from $54.00 to $93.00. In the report, Leggate noted, “We are upgrading Cabot Oil & Gas to Buy. Since we reinstated coverage at the start of the year, management has materially increased its assessment of per well EUR's in its flagship Marcellus play. Using management's stated well design, and risk parameters that recognize the proportion of prospective acreage, the impact is a material increase in the associated NAV dropping the implied embedded long term gas price from ~$5.50 at the start of the year to $3.50 today. Production continues to accelerate, with several wells now delivering above type curve IP rates of 17 mmcfe/d. In our view, Cabot's top line growth more than compensates with a forward EV/DACF multiple generating the highest multiple compression in our coverage group for the year 2013-2014.” Cabot Oil & Gas Corporation closed on Wednesday at $63.96.
Posted In: Analyst ColorUpgradesAnalyst RatingsBank of America Corp.
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